Jamesh921 said:
Lisa wrote:
""" Raise your prices 20%. Don't tell anyone, just do it. If anyone bitches, tell them it's the oil prices. Then you can both bitch about Obama.
Then after a few weeks you will have some extra funds, and when you are in a place with extra funds you think a little clearer. Plus... you will see that very few blink at the price change, and it will shift your perspective. """
I call BS on that.
Apts, motels, propery mgmnt, rentals will immediately FIRE YOU if you unsuspectingly raise your prices by 20%, no matter what the oil prices are.
You're a pretty smart girl, Lisa. But, you're absolutely wrong on this issue. That's OK though. I was pretty surprised when I found out that I didn't know everything too. ;-)
Have you actually tried it?
If you are charging for apartments, what .20 cents per sq ft, and you go to .24 - are you telling me they would drop you? Are they only using you because you are cheap -and not for other reasons?
Would you consider moving to some HOMES instead, and bump your price up to the going residential rate in our area, which is closer to .50?
If the ONLY reason someone is choosing you is because you are cheap... then you need to target customers who are sick of low price and low quality and would pay a bit more for more results.
The belief that anyone would lose ALL of their business because of a 10 or 20 percent increase is a belief that will keep someone stuck in a business they hate for way too long.
Any of you who have actually raised prices at any point in the past six years - what say you? How much did you raise it, and how much did your volume of business go down?
And... so you really know what your hard cost of cleaning per sq ft is for your operation? (Most have no clue and are literally operating at a loss.)
When I have Piranha Member who want to make more money, and who are VERY underpriced, this is what I tell them to do:
1) Package their services into 2 or 3 choices - this way you can have any customer pick the bundle that best fits their needs and/or budget. I tell them to make their current price their bottom package.
2) If they are only offering one price - then I tell them to same day bid at their newer, higher price, and if they want to offer the "old" price to prior customers, choose to do so on a case by case basis. For me, I will mail to my list that prices are changing, and because they are one of our current clients we will give them the old price if they book in the next 30 days - this always generates calls. I do not list any prices, I just explain that they are changing due to our increase in expenses (always going up in CA) and because we want to be able to support the same quality work and service that they expect of us.
3) Have the office receptionist spend a day on the truck to SEE all the true labor that goes into doing a typical job, and then give her the price list. Chances are... she will tell you that you need to be charging a lot more than you are. I often see some of the biggest sales-killers being the "owner" who would never pay to hire a cleaner being put in charge of closing the deals. People who know LESS about the craft will see it as more valuable, because when you get too close to what you do, you stop seeing the real value of it. Because you could "just do it myself" means you would have a tough time understanding those who "just want someone else to do it right."
Most cleaner do not raise their prices because they don't believe people will pay more. They quit before they even ask for more. Their biggest obstacle is between their two ears.
I know because I have had this barrier myself, as has all my longest employees, as have many cleaners I've worked with over the years.
All I'm saying is give it a try... one of 3 things will happen. Your volume will stay the same (and you'll make more profit). Your volume will go up (and you'll make more profit). Or you may lose a few jobs (and you will likely end up with the same net profit anyway... but a bit more time not behind the wand to get it.)
Raise your price by 20%, you can lose just over 40% of your volume and still net the same net profit. Not gross, but net, in your pocket.
So... ask yourself this... if you raised your prices 20%, are about half of your customers going to go elsewhere? If the answer is yes - then you have a bigger problem on your hands than just your price.
If you are scared - do 10%. But I'd rather have you do 20%, and give some room to discount a bit to clients you really like, instead of raising it 10%, seeing NO difference in your job volume, and then kick yourself for not doing 20 instead.
Just some things to think about....
Lisa
